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2019 (11) TMI 436 - CESTAT ALLAHABADClassification of services - commercial training and coaching services or business auxiliary service? - franchise fees - revenue sharing model - case of appellant is that the agreement between the Appellant and Career Launcher is on a principal to principal basis with no element of agency and the Appellant functions in the capacity of an independent contractor where the Appellant is responsible for providing the cost of the equipments, premises, furniture and allied articles for the recruitment and selection of staff and the faculty - double taxation - Revenue sharing. Whether the taxable service was provided in relation to education? HELD THAT:- The word “education” has a wide meaning and includes the practice of teaching or training in a particular subject. The adjudicating authority, even after noticing that education apart from the process of teaching and learning includes training in a particular subject, erred in observing that ‘education’ is different from ‘training’. In this connection what is important to notice is that the exemption is “in relation to education”. It cannot be doubted that the activity conducted by the Appellant is ‘in relation to education’ and, therefore, the Appellant would clearly be entitled to the benefit of the exemption Notification dated 10 September 2004. It would be appropriate to refer to the decision of the Tribunal in SUNBEAM INFOCOMM PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE [2014 (8) TMI 783 - CESTAT MUMBAI] wherein even though education in Information Technology was conducted through authorized training centers throughout the State of Maharashtra, but the Appellant therein was only an authorized agency for supplying books of various courses, creation of authorized training centers, supervision of authorized training centers, collection of fees for various courses conducted and remitting the same to the authorized training centre. The Tribunal held that the activities were incidental or ancillary to the promotion of Information Technology Education of Maharashtra and, therefore, would be exempted under the Notification - In the present case, apart from imparting some of the aforesaid activities, the Appellant is in fact also providing ‘education’ to the students and, therefore, the principles enumerated in the aforesaid decision of the Tribunal will apply with greater force in the present case. We express our inability to accept view taken by the adjudicating authority. Career Launcher has paid Service Tax on the entire amount of fees collected from the students. It is on a revenue sharing basis, that part of this fee is remitted to the Appellant by Career Launcher. The Appellant, therefore, cannot be required to again pay Service Tax on this fee. In fact no service is provided by the Appellant to Career Launcher because in terms of the agreement, the revenue is shared between Career Launcher and the Appellant. Reliance can be placed on the decision of the Tribunal in M/S. SAMADHAN SYSTEMS (P) LTD. VERSUS C.C.E., JAIPUR-I [2018 (2) TMI 1049 - CESTAT NEW DELHI] where it was held that no Service Tax liability will arise on the business partner of MAAC under commercial coaching and training service. The last alternative contention of the learned counsel for the Appellant, is that the Department cannot be permitted to discriminate between various assesses inasmuch as in the case of certain assesses, relating to same issues, a view was taken that training centres like the Appellant will not be required to pay Service Tax under the category of “business auxiliary service”, if Service Tax has been paid on the entire amount by the agencies with whom the agreement has been entered into - There is considerable force in the submission advanced by the learned Counsel for the Appellant. Appeal allowed - decided in favor of appellant.
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